Auditing in the Athenian state of the golden age (500-300 B.C.)

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George J. Costouros ASSOCIATE PROFESSOR OF ACCOUNTING SAN JOSE STATE UNIVERSITY
AUDITING IN THE ATHENIAN STATE OF THE GOLDEN AGE (500-300 B.C.)
Abstract: Accountability and control of state revenues and expenditures in the Athenian state of the Golden Age was achieved through the verification process by three board of state accountants, based on the accounting records of execu-tion and related budgetary and other documents. More specifically, the purpose of this process was to (a) strengthen the integrity of the accounting system by providing additional controls in the management or state resources, (b) establish accountability against any public officials in charge of public funds, and (c) pro-vide dependable reports to the people on the management of these funds. The three boards were the Council Accountants, the Administration Accountants and the Examiners. Although the main purpose of the attest function was the dis-covery of fraud, internal controls were also evaluated by comparing the formal-ized budgets with the accounting records of execution. This conclusion is some-what contrary to the assumption that internal controls were not recognized in ancient times.
In addition to the use of individualized budgets by the Athenian state of the Golden Age of Greece,1 accountability and control of state revenues and expenditures was achieved through the verifica-tion process by three boards of state accountants, based on the ac-counting records of execution and related budgetary and other doc-uments. More specifically, the purpose of this process was to (a) strengthen the integrity of the accounting system by providing additional controls in the management of state resources, (b) estab-lish accountability against any public officials in charge of public funds, and (c) provide dependable reports to the people on the man-agement of these funds.
The requirement for audit
The Athenian State of the Golden Age was organized under a sys-tem characterized by division of authority, due to the people's dis-trust of a centralized government. Thus, the business affairs of the state were administered jointly by various boards which consisted of groups of individuals selected or appointed by lot. These boards